Renters will take decades to save for a home deposit

Buying a home is becoming increasingly out of reach for many renters, suggests new research from Scottish Widows which says that since the average private renter saved £2,180 in the last year, it would therefore take 23 years to accumulate the average deposit (which they estimate at £50,845).

Even the average deposit for a first time buyer – at just under £28,000 – would take almost 13 years.

The survey of more than 5,000 UK adults also indicates that many renters are giving up on property ownership as only 29% say they are actively saving to put down a deposit on a home.

According to the report, when renters have managed to put money aside they have, on average, less than half the amount (£12,142 vs £29,382) saved by those who are not paying private sector rents. Those who rent privately are 50% more likely than the average to have no savings at all (25% vs 17%).

“We live in a society where many strive to own their own homes,” said Iain McGowan, Head of Savings and Investments at Scottish Widows, “but for many people facing high rent and increasing living costs this isn’t going to be achievable. Whilst this is concerning, what is most worrying is that over a third of renters have no savings at all and are leaving themselves vulnerable in the short and long terms.

“The importance of saving goes much further than getting on the property ladder as a healthy savings pot can provide an invaluable buffer for the unexpected or tough times. Whilst owning a property is seen for many as something to work towards, we need to ensure that people are able to manage their outgoings, whether rent or a mortgage, and create that safety-net for unexpected bumps in the road.”

Yes they could always sleep on somebody else’s sofa, preferably indoors rather than in a skip or in the back of a van.

hodgeey

Lots do; the ones that will get ahead.

DB

Cynical survey from a savings company saying people are not saving enough.

Norman

Is it safe to save when you consider things like Cyprus and can it happen here in the UK?
Is the return on saving adequate to encourage or motivate savings?
Plus if you rent and have problems then everything is given to you, rent and council tax rebate etc. Because you don’t have the income anymore.Need care in old age and it is given free.
If you own your own property then you have to sell it and use the proceeds before you get anything. Where is the encouragement.

armchairnavigator

they are building more houses, all over the place. the problem is the terms which are being offered for lending. we need a hard limit on borrowing – 3.5 x annual salary, which will bring the prices down, which is perfectly doable in many parts of the country. its only the whinge bucket snobs in the south east they claim ‘oh i cant possibly move away from mummy’ … well everyone has, so deal with it.

armchairnavigator

i see exactly why people want to own their own home. no rip-off nazi rental agency staff poking their nose into your private life every few months. guillotine the rental agencies, fix the reluctance to rent problem.

armchairnavigator

prices are defined by the limits on borrowing, not by the cost of building the property. reduce the borrowing limits ( or raise interest rates ), and the property prices will fall.

lonsouth

Its not the landlords’ fault – blame successive governments who are happy to open the housing market to – literally – the entire world, but not allow supply to grow in tandem. I can see why it suits governments – its another illusion of wealth creation which makes certain parts of the electorate feel wealthy, but like Russian money in Cyprus, it does not make for a sustainable model because it’s not actually creating wealth.

articuleum

The other reason the government needs to prices to remain high is because they expect people to use their housing equity in later life to pay for services, such as old age care.
But house prices will not rise if there is no house price ladder, and there can be no ladder without easing of credit and availability of housing stock, and once that starts you get another artificial boom and we all know what comes after the boom….